The Backdrop's Really Bad

The backdrop is so bad that we don't extrapolate all of the good news.

It's really rather amazing to see Gilead (GILD), Celgene (CELG), Sherwin Williams (SHW), Jefferies (JEF), Titanium Metals (TIE) and Precision Castparts (PCP) up huge either because of good news from the drug pipeline or from takeovers, including ones where the acquirer rallies, and it means nothing, nothing at all.

It is a sign, yes, that the backdrop, the lack of compromise in Washington totally controls. Believe me, that's enough deals and enough good news to make people sit up and say "hey, I can make money, I shouldn't leave the table."

But with the tax rates going up and employment claims perhaps going up as companies fire, I can blame no one for selling.

I just think that, when you consider the arguments of my colleague Doug Kass and you look at how stocks can't seem to stay up as they couldn't last week, even in the face of some terrific equity news, it is perturbing, to say the least, particularly if this is where we are going to be until a deal is reached. That is, if a deal can be reached before $600 billion in tax increases come in fewer than 50 days.